THE PRESIDENT: Thank you very much. Thank you, Governor.
Thank you, Alan. Thank you, ladies and gentlemen, for being here.
Mostly what I want to do is have a conversation tonight, but I would
like to just briefly comment on the events of the last couple of
days, in the context of what's happened for the last four and a half
years.

When I came to Washington after our campaign in '92, I had a
very clear idea of what I was trying to do. It seemed to me that the
country had to make a number of changes if we were going to go into
the next century with the American Dream alive for everyone, leading
the world in all the ways that are so important, and giving our
children the future they deserve. And I felt, among other things,
that our party, which has historically been the progressive party,
had to advocate changes that would move beyond the old divisions
between growing the economy, preserving the environment, helping
business, helping labor, being tough on crime, being compassionate
and smart -- all those -- what I have always thought were kind of
false choices. And that we ought to have a simple strategy that
asks, will this create opportunity for people who are responsible
enough to work for it; will this bring us together, rather than drive
us apart; will this preserve our leadership for peace and freedom and
prosperity? That's what we've tried to do.

Before I signed the new budget law we had reduced the deficit
by 80 percent, we had a historic drop in welfare rolls, we have the
smallest percentage of people on welfare we've had since 1970 now.
We had dramatic drops in crime -- last year, the biggest drop in crime
in 35 years. And a number of other very positive things happening.

Now, this budget I believe will be very good for the economy
because it will continue the downward trend of the deficit. It will
bring us into balance. It will produce a surplus. And it will also
sustain itself over the years ahead. There are tax cuts in the budget.
We've been criticized in many quarters for them, but I would like to
make a couple of points.

Number one, the capital gains and the estate tax relief, which
the Republicans wanted, have gotten a lot of publicity. But it's
important to note that 80 percent of the tax relief went to the
children's tax credit for middle income people, to the education tax
credits to open the doors of college education to all who are willing
to work for it, and to the initiatives primarily directed at urban
America -- to the areas which have not participated in our recovery
-- 80 percent.

Number two, perhaps even more importantly in the larger economic
sense, in the aggregate, these tax cuts are about one-eighth the size
of the tax cuts in 1981 that led to the permanent structural deficits.
And that's very important that the American people understand that.
We did not just -- this Congress did not just sort of take the lid off
the Treasury in a kind of a political orgy. This was a very
disciplined, limited thing.

Of course, the budget also has the biggest increase in investment
for education in over thirty years; the biggest increase in investment
for children's health since Medicaid was established in 1965. It is an
historic, positive, progressive budget that will be pro-economic growth
and good for the people of this country. So I feel good about that.

I feel good about a lot of things that happened in foreign
policy -- our expansion of NATO, our working with Russia in that
regard. I feel good about the President's Summit of Service we had
in Philadelphia. I'm very committed to this initiative on examining
and improving race relations, which I think is absolutely critical
to our future. All these things have been started this year.

Perhaps most important over the long run, I'm committed to seeing
this effort to establish national educational standards of excellence
in our schools for the first time in history. We cannot back up on
that, and I hope you will help me get all the people in your respective
states on that bandwagon.

We're coming into the fall. There are a lot of other exciting
issues that we'll have to deal with, and I'll just mention them very
quickly and then sit down and we'll have a conversation -- but in the
remaining months of this year, I am hoping that we can secure fast
track authority from Congress so I can continue to expand trade for
America. Our economic analyses are that one full fourth, 25 percent
of the economic growth this country has had in the last four and a
half years, which is now 13 million new jobs, a fourth came directly
from the efforts to open markets to American products and services.
So I think that's important.

I think it's important that we pass the McCain-Feingold
campaign finance reform bill. It's finally coming to a vote in the
Senate. For some of you, it will save you a lot of money if it
passes. It will be a good thing. But it would be a good thing for
both parties because we'll have to go out and find more contributors
and more people to participate and distribute the responsibility, and
that will be a very good thing.

But, finally, let me say this whole campaign finance reform
effort will never succeed unless we reduce the cost of campaigns,
which will only happen if we get free air time or drastically reduced
air time for the candidates. That is an absolutely critical thing.
Unless we change the cost environment, no matter how you work with,
manipulate or change the contribution rules, there will still be the
costs out there and they will flow somehow, because people will have
to communicate with the voters and will have to be able to reach the
voters with a message.

The third thing I want to mention is coming up, that I hope all
of you will take an interest in, is the climate change debate. In
December, in Japan, the advanced nations of the world -- and we hope
all the others -- will be called upon to make commitments to reduce
the greenhouse gas emissions of our economy so that we can reduce the
rate at which the planet is warming up. This is a big deal. If we
have just a few degrees of warming of the planet over the next hundred
years, it could lead to rises in the sea levels which could, for
example, flood the entire Florida Everglades. It could change the
whole economic structure of American agriculture. So we have to find
a way to grow the economy and improve the environment.

We are going to begin dealing this fall and over the next year
and a few months with the whole question of entitlement reform, which,
simply put, is what is the best way to preserve the integrity of
Social Security and Medicare in the 21st century when the baby boomers
retire. That's really the issue. Social Security right now is secure
through 2029. We just added 10 more years to the Medicare trust fund.
The issue is, how can we preserve the integrity of these programs and
the benefits they bring in a century when people are going to be living
longer and when the baby boomers will retire and there will be just
barely more than two people working for every person retired.

We've never dealt with an issue like this without a crisis
before, but the bottom line is, if we make modest changes now, we
can avoid imposing drastic changes that are children will have to
make later. I think the responsible thing to do is to deal with the
modest changes now. So I hope we will do that.

And finally, in October, the First Lady and I are going to have
a big conference on child care. I am still -- I think "obsessed" is
not too strong a word -- with the challenges so many Americans face
succeeding in raising their children and succeeding at work. And there
is still not a systematic network of child care out there.

We have gotten a lot of help from the Congress in establishing
child care networks for people who will be moving from welfare to work,
and that's good. But there are a lot of people who have never been on
welfare who work for modest wages, whose children simply do not have
access to quality, affordable child care. And I think that's one of
the next big frontiers in our efforts to bring America together.

So I hope you will help us with that, and I hope you will follow
it, and I hope you will be proud of the fact that you have supported us
and you have made possible the best economy we've had in a generation
and progress on all these social issues and progress abroad as well as
at home. That's what the political process is supposed to do.

And if we can keep going and do this flat out for three more
years, I think we can watch our country move into a new century and
a new millennium, confident that the best days of America are still
ahead. And that is our obligation as citizens and as human beings.
Thank you very much. (Applause.)